With focus on Latin America, AA Cargo moves forward

Monday, March 11, 2013

American Airlines Cargo is beefing up its presence in Latin America, continuing to add capacity to a region where it has focused its efforts for a number of years.
The carrier has taken delivery of its first Boeing 777-300ER, adding service from Dallas to Sao Paolo, Brazil, last month. According to AA Cargo President Kenji Hashimoto, plans are in the works for service from Dallas to Bogota, Colombia, and two new Brazilian routes out of Miami.
Last month, officials applied for regulatory approval for services to Sao Paolo from Los Angeles and Chicago.
“We’re a big part of Latin America, both in people, and in business, and in what makes up American Airlines,” Hashimoto told American Shipper in an interview. “We’ve been there a long time, both for cargo and for passenger, and we still see continued upside.”
Domestically, Hashimoto says there’s room for growth among service stations and expanded offerings driven by customer demand. Many of these improvements will come once American Airlines mergers with US Airways in the third quarter. The $11 billion deal is still under regulatory scrutiny, but if it is approved, it will create the largest domestic airline.
While discussions among the two airlines have been severely limited in scope, and they're continuing to operate as separate carriers, Hashimoto said a combined American-US network will greatly expand AA Cargo’s offerings.
“If you think about the combined company, we’re going to expect to maintain all the hubs and the service to all the destinations that are currently served by American and US Airways,” he said. “We feel that there’s opportunity to expand small-city service to improve connectivity both for passengers and for cargo when you put the two networks together.”
He maintained that once the two companies merge, cargo will keep its importance in the new American Airlines. As long as customers still appreciate the service and it continues to generate revenue, cargo services won’t decline, he said. But that doesn’t necessarily mean American will add services to rival United Continental, the largest domestic cargo carrier.
“It’s not necessarily about how big we are, but it’s about how well we serve our customers,” Hashimoto said. “That approach served us very well through the restructuring.”
American filed for bankruptcy and began the restructuring process, with a target of finding $3 billion in savings, in late 2011. Since then, officials have completed the majority of the financial restructuring by reducing debt and renegotiating facility, supplier and leasing contracts. (Due to its current status, creditors needed to also approve the merger with US Airways.)
Hashimoto said the company is currently well on its way toward the $3 billion goal and should hit the mark by the end of this year.
“We started seeing some of it in our fourth-quarter results,” he said. “There’s more coming in 2013.” - Jon Ross